Monday, February 21, 2011

Brazil To Cut Defense Spending

By Robert Wall wall@aviationweek.com
Brazil is looking at a 26.5% cut in defense spending, with acquisition programs largely unaffected, the Brazilian government indicated.

The projected reduction in defense outlays will not necessarily affect the F-X2 fighter competition pitting the Boeing F/A-18E/F against the Dassault Rafale and Saab Gripen.

Defense ministry Nelson Jobim notes that even if a source selection would come this year, the real affect on military spending would not be seen until 2012 and 2013, so the cut to 2011 outlays. Additionally, even once a type selection is made, a contract will likely take another year to craft.

There are increasing indications, though, that the country’s president, Dilma Rousseff, is ready to defer a decision at least until next year.

Jobim says the defense cut – of around 4 billion reais - will be largely applied to operating and sustainment accounts.